Flower power sees profits bloom

Newsroom 25/01/2010 | 11:03

With a business model that stems from the Netherlands, Gradina Bakker Olanda has flourished on the local market and could plant the seed of inspiration for other budding entrepreneurs interesting in selling flower bulbs.

 Anda Dragan

 

Beauty can be found in almost any business, due to each one’s distinctiveness, the challenges it poses and the rewards it offers the entrepreneur behind the figures. But when that business is selling flowers, the beauty is more obvious to the naked eye. The current crisis has not caused every company to wilt, with one such example being Dutch firm Bakker, which specializes in trading flower bulbs. It entered the local market in the fall of 2007, initially operating through a local representative. But the business bloomed quickly after its entrance, and Gradina Bakker Olanda was established in Romania at the beginning of 2009. The 100 percent Dutch company is the sole holder of the rights to trade Bakker products on the local market. But why did it make the move, when the first signs of the crisis were already sprouting in Romania?

The answer is simple: with Romania and other countries’ accession to the EU, the company wanted to benefit from the great potential that these markets offer. Another significant reason for trying to penetrate the local market was that Romanians are keen gardeners.

But the local competition is fierce, and breaking into the flower market is no mean feat. “Our competition comes mostly from the retail sector, meaning garden centers. However, we can offer a much wider range of products, and of higher quality, thanks to our high-end production facility in Holland,” says Robert Jan Prick, general manager of Gradina Bakker Olanda. In his opinion the firm’s array of products is one of the main competitive advantages it has over other players on the market.

The business model is quite simple: a customer can order from the product catalogue by post, phone or fax, and collects their parcel from the nearest post office. Prick says that he can’t generalize too much about the type of customers that use Gradina Bakker Olanda’s services, but that potential buyers are familiar with mail order. “Once people discover the ease of home delivery, they usually remain loyal.”

The cost of the bulbs depends on the type of plant. “Sometimes we sell five or ten plain flower bulbs for a discount price of RON 20, or at the high end of the scale 25 trees or hedges. The latter can cost up to RON 600,” says Prick. There are also additional services: a guarantee of up to five years on perennials and one for all bulbs; customer care; and extra information about plants. The company also offers consultancy services for its VIP customers on how to landscape their garden. These additional services are essential in the current climate, because simply selling a product is no longer enough to keep your customers. Most – but not all – of the company’s products come from the Netherlands. Some roses come from Italy and even as far afield as Kenya.

As for delivery, the company can do it only when weather conditions permit, both in the Netherlands and Romania. The firm also lets its customers choose when they want to receive their parcel. “If the customer orders in season and wants the order direct, we deliver it within seven working days,” says Prick.

But even this business is not all roses. Prick has had trouble convincing new customers that the ease of home delivery can be combined with the high quality of the Dutch bulbs. “Many people do not think it possible, until they experience it themselves for the first time,” says the general manager. The most difficult point in setting up the business was surmounting Romanians’ lack of familiarity with mail order companies, as well as getting the distributors to deliver the parcels within the desired timeframe, and for a reasonable cost. “Our relationship with the Romanian Post has improved significantly after two years of collaboration, because we have come to understand each other’s needs and restrictions better,” says Prick.

At the moment, Gradina Bakker Olanda remains a mail order specialist. “But our competitors are looking to expand and will enter onto the local market,” says Prick. This could present a big challenge for the company in the years to come. However, Bakker is now present in twenty European countries, with a market share between 50 and 100 percent.

In future, the general manager says that the company has expansion in all EU countries on its agenda. “We are currently improving our production process, which should make it possible to penetrate large markets such as Russia and Ukraine in the years to come,” says Prick. He adds that the company does not intend to extend throughout a franchise system because “we have had some experiences with joint ventures and they were not always successful.”

The current crisis is temporarily putting a brake on Bakker’s growth but Prick remains optimistic: “I expect that 2010 will be another difficult year, but I also think that our current strategy, which combines an assertive marketing approach with very good after sales services, is proving to work.”

 

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